The 70 000 000 000 $ question

[Pidgeon]

From Sep 2 the total crypto market cap went down more than 70 billions, that's more than the combined anual GDP of the baltic states with 5 million people.

Where have all those money gone?
Or, they where never invested in bitcoin and crypto?

[1714180366]

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[Pidgeon]

Hahahaha, 70 billions evaporated and nobody on this forum has a clue to explain what happened?

[McToth]

Hahahaha, 70 billions evaporated and nobody on this forum has a clue to explain what happened?

Keep calm and just smile 

[skorupi17]

From Sep 2 the total crypto market cap went down more than 70 billions, that's more than the combined anual GDP of the baltic states with 5 million people.

Where have all those money gone?
Or, they where never invested in bitcoin and crypto?

Do not mind about the marketcap. It existed out of nothing so it is nothing. If you ask me, marketcap does not have any worth to the cryptocurrency. It is just the total supply of the coin multiplied by its price or something. So you do not have to be bothered at all.

[Archy159]

Didn't you hear?
Some guys grandmother lost it all

[Drnice]

Lolz,  I heard it was used to buy pizza, haha or maybe it is get under  the bed of the forum.

[Thekool1s]

Hahahaha, 70 billions evaporated and nobody on this forum has a clue to explain what happened?

Well you clearly don't understand how coin market cap calculates its market evaluation. There is no true market evaluation of bitcoin. It's just plain bitcoin in circulation x price of bitcoin, so it never was a 70 billion dollar question. It's just trolls like you who don't have a single clue about what's going on.

[DannyHamilton]

Where have all those money gone?
Or, they where never invested in bitcoin and crypto?

First of all...

There is no actual "Market Capitalization" for cryptocurrencies.  That phrase has no real meaning when talking about a commodity or currency.  It is a phrase that applies to shares of a company or business.

However, people who buy-and-sell bitcoin as a speculative investment often like to think of Bitcoin like a stock, so they multiply the current exchange rate by the total bitcoins created so far and mistakenly use the words "Market Capitalization" to describe the result.

That being said, "Market Cap" has nothing to do with the amount of money "invested".

"Market Cap" is simply a calculation of:
price X quantity

So, for example:

Lets say I create a brand new crypto currency called PidgeonCoin.  Lets say I create and give out to 1,000 people (including you) 100 PidgeonCoins each for free.  The total number of coins created so far is 100,000, but the "Market Cap" is still $0.  Now lets say an exchange lists my made up coin, and you list 1 PidgeonCoin for sale on the exchange.  Lets say someone that doesn't have any PidgeonCoins yet buys that 1 PidgeonCoin from you for $50.

The total amount of fiat "invested" so far in PidgeonCoin is $50.

The market value of 1 PidgeonCoin is now established at $50/PDC.

The value of your remaining 99 PidgeonCoins at the current market rate (for as long as $50 remains the current market value) is $4950 .

But the "so-called" Market Cap is:
$50 X 100,000 coins = $5,000,000

Notice that there hasn't been $5,000,000 invested in PidgeonCoin.  Only $50 so far.

Now lets say I later list 1 PidgeonCoin for sale on the exchange.  Lets say someone that doesn't have any PidgeonCoins yet buys that 1 PidgeonCoin from me for $5.

The total amount of fiat "invested" so far in PidgeonCoin has now INCREASED from $50 to $55.

The market valueof 1 PidgeonCoin has now DECREASED from $50 to $5.

The value of your remaining 99 PidgeonCoins at the current market rate (for as long as $5 remains the current market value) has DECREASED from $4950 to only $495.

But the "so-called" Market Cap is now:
$5 X 100,000 coins = $500,000

Notice that $4,500,000 didn't go anywhere. The total amount of money invested in PidgeonCoin has actually INCREASED.  You never had $4950, you just had 99 PidgeonCoins.  What has changed is how much those PidgeonCoins are worth.

[vroom]

From Sep 2 the total crypto market cap went down more than 70 billions, that's more than the combined anual GDP of the baltic states with 5 million people.

Where have all those money gone?

I lost my wallet 

[Hijikata]

Notice that there hasn't been $5,000,000 invested in PidgeonCoin.  Only $50 so far.

Now lets say I later list 1 PidgeonCoin for sale on the exchange.  Lets say someone that doesn't have any PidgeonCoins yet buys that 1 PidgeonCoin from me for $5.

The total amount of fiat "invested" so far in PidgeonCoin has now INCREASED from $50 to $55.

Isn't the amount invested decreasing since I'm pulling out 5$ when I sell my pidgeoncoin?

[Antonio_q3]

From Sep 2 the total crypto market cap went down more than 70 billions, that's more than the combined anual GDP of the baltic states with 5 million people.

Where have all those money gone?
Or, they where never invested in bitcoin and crypto?

All right, everyone returned to their seats.

[949miner]

There is not any real market cap, but it is obviously that the money has never dissapeared or evaporated just like you said, when you withdraw your bitcoin profits, the total marketcap decreases too, and when you sell your fiat it does too. So just think about it, they are just like you and me, and everyone in the forum, those people were probably selling their bitcoins for fiat, and a part of them could just sold those btc for tether, so there is nothing worry about.

[Coldsnap4457]

DannyHamilton gave a great explanation.

Another way to look at it is this.

Market cap is calculated based on:

units X price per unit

But it's not linear.

Example:

10 units X $10 price per unit = $100 market cap

This assumes that every unit can be sold for $10.

When people start selling, price goes down from $10.  The 10 units were never worth $100.

When the stock market crashed in 2008, far less than 40% of the shareholders sold their stock, but the price went down 40% and people said that 40% of stock market value was wiped out.  This is also inaccurate.